Friday, June 12, 2015

US retail sales beat estimates; market buys the rumor, sells the fact

     US retail sales beat estimates; market buys the rumor, sells the fact
    USD rallied ahead of the number, jumped when it came out, then quickly fell back
    Nonetheless remains above yesterday’s levels this morning

     Focus now turns to next week’s FOMC meeting
    What kind of guidance will they give on future rate hikes?
    How will the “dot plot” change? In March the weighted average estimate for Fed funds at year-end was 0.77% = 2 rate hikes (possibly Sep & Dec, when there are press conferences scheduled). Any change?

     Greek situation goes from bad to worse
    IMF technical team leaves Brussels because all the talks are now political
    German newspapers report growing opposition to 3rd bailout no matter what
    Market is not yet discounting failure in the talks. Greek stocks up 8% yesterday.

     Oil prices fall slightly on reports of record OPEC output
    Saudi, Iraq, UAE all pumping record amounts; so is US apparently
    I expect oil to fall, bringing CAD and NOK down with it

     Today:
    Eurozone: Industrial production for April expected to rise = EUR-positive
    UK:  Speech by hawkish BoE MPC member McCafferty to be published.

    US: PPI for May expected to rise mom; preliminary U of M consumer sentment index for June expected higher = USD-positive

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